Here is the situation...about a year ago, I bought a new car. I put 1500.00 down, and rolled over a loan for 2700.00 from my last car and truck. The total cost of the car was around 10 grand, I borrowed about 13 or 14, not sure how much exactly. About a month ago, it was totalled. At the time of the loss, I still owed about 11500 on the car, the other insurance paid about 8500 on the car...leaving about 2500 or so on the loan. Will my Gap pay off the loan, or only part of it since I rolled over another loan into it? My insurance agent has not worked with Gap too much and isn't too sure, he said it would be a "learning expirience" for him!
2006-06-20 18:01:45 · 5 answers · asked by mikeswife 1 in Cars & Transportation ➔ Insurance & Registration
Gap coverage pays the difference between whatever your primary insurance pays and the outstanding loan balance. It doesn't matter if part of the loan balance was rolled over from a prior loan or even was a cash-out refi. I wouldn't even mention the details of the loan and rollover amount to the insurance company, especially if they didn't ask about this when you purchased the policy.
Don't be buffaloed by the agent's "learning experience". If he sells the product, he has an obligation to know what he's doing. Whomever underwrote the gap coverage is liable for the difference between book value and the loan balance. Check your policy for any limits, but you should be fully covered; that's the whole idea behind gap insurance anyway.
Gap insurance will also pay off the balance of a lease contract if a vehicle is totaled and the regular insurance proceeds are not sufficient to pay off the contract.
2006-06-21 01:02:01 · answer #1 · answered by Bostonian In MO 7 · 2⤊ 0⤋
Gap Insurance pays the difference (or gap) between hwta the insurance company pays you (market value of a secondhand car) and what the leasing company wants paying.
2006-06-21 04:13:20 · answer #2 · answered by Nimbus 5 · 0⤊ 0⤋
the gap insurance will only pay the balance of the rolled over loan.
2006-06-21 01:33:17 · answer #3 · answered by carrguy73 2 · 0⤊ 0⤋
let me break it down for you my son.lol
lets say you bought the car for 10k, and after you got it stolen your car was worth 8k. so your insurance will pay you what the blue book value of the car which is 8k and your gap inusrance will pay the remaining balance of your loan, which will be 2k. very easy ****
2006-06-21 01:14:04 · answer #4 · answered by Mr.Right 1 · 0⤊ 0⤋
gap insurance covers whatever the insurance company does not cover
2006-06-21 04:01:49 · answer #5 · answered by yenko 1 · 0⤊ 0⤋